Facebook faces opposition to privacy settlement

Barbara Ortutay

Facebook may have considered the matter settled, but a group of consumer and children's advocates are renewing their legal battle over teenagers' privacy on the world's largest online social network.

Privacy issues have dogged Facebook, mostly in its earlier years. At issue is how the company uses the vast trove of information that its 1.23 billion users share on the site. In this case, the focus of a 2011 class action lawsuit, Facebook's use of people's images in advertisements known as "sponsored stories" caused the concern. This allowed companies to pay to retransmit users' activities to their friends' pages. If someone clicked the "like" button for a brand, the click could show up as a "sponsored story" on friends' pages.

Facebook agreed to pay $20 million to users and in charitable contributions and make changes to its privacy policies to settle the lawsuit. The settlement was approved by a federal court last August, though appeals are still pending.

On Thursday, the nonprofit Public Citizen, along with six parents of teenagers, filed a legal brief in a federal appeals court in California saying the settlement should be rejected.

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Public Citizen and supporting groups such as the Centre for Digital Democracy argue that the settlement should have not been approved in the first place because using minors' images in ads without parental consent violates the law in seven states.

"Class-action settlements are supposed to compensate people for wrongdoing and deter the defendant from engaging in the bad behaviour in future. This settlement does neither," said Scott Michelman, the Public Citizen attorney handling the case, in a statement.

Jodi Seth, a spokeswoman for Facebook, said that the settlement "goes beyond what any other company has done to provide consumers visibility into and control over their information in advertising."

"The same arguments on state law were raised and rejected by the court last year, and a dozen respected groups continue to support the settlement," Seth added.

One nonprofit group that was picked to receive money from the settlement has rejected it. The Campaign for a Commercial-Free Childhood announced on Thursday last week that it was refusing an award of $US290,000, equivalent to more than 90 per cent of its 2013 budget, because it believes it goes against its "mission to protect children from harmful marketing".

Margaret Becker, one of the parents involved in the lawsuit, said she didn't know about Facebook's practice of using users' images in ads until a friend mentioned it to her. She asked her daughter about it, who said she saw her image pop up in a sponsored link on a friend's Facebook page. It was for a band she liked.

"Her liking a band, that's fine, I don't have any problem mentioning to her friends that she likes a band," Becker said. "[But] that's really different from her being an advertisement for that band."